French finance minister says government policies "bearing fruit" as Fitch lowers France's rating to AA - say what?

You don't need to be an expert in economics to know there's something not quite right about two pieces of news that broke towards the end of last week.

First up ratings agency Fitch reduced France's credit grade from AA+ to AA saying that the country's "efforts to trim its fiscal deficit have fallen short to avoid a downgrade."

Or in ratings speak, "The weak outlook for the French economy impairs the prospects for fiscal consolidation and stabilising the public debt ratio."

Not exactly a resounding endorsement of France's efforts to its tackle its public debt or the measures put in place to boost the economy.

But hey ho. This is France, the country in which successive governments seem to believe faithfully in the power of La méthode Coué or autosuggestion and positive thinking.

In other words, if you say something often enough, you'll come to believe it - even if all the evidence points to the contrary.

So up popped the French finance minister, Michel Sapin, to share his response in a statement which...well almost defies belief.

Michel Sapin screenshot from RTL radio interview, October 2014

"Government policies are beginning to bear fruit as companies benefit from cuts in levies and that'll continue in the coming years," he said.

"In Europe's difficult economic environment in Europe , we're going to maintain the course we've already set with the implementation of planned economies , and the continuation of reforms needed to boost growth and make companies more competitive."

In other words, an ostrich head in sand style, "We're not taking any notice of what any ratings agency says as we know best how to (mis)handle our own economy".

Oh...by the way M Sapin, Father Christmas isn't real.

Is France a "time-bomb at the heart of Europe"?

The weekly international affairs and news magazine The Economist certainly thinks the country has the potential to be.

(screenshot of The Economist front cover from the official site)

It devotes a 14 page special report on France in this week's issue and runs with a front cover that is far from being the truth - at least as far as the French prime minister, Jean-Marc Ayrault, is concerned.

"It's just a magazine going over the top in an effort to sell more copies," he said, reacting to the report.

"I'm not impressed."

A synopsis of the report can be found online here.

It's worth a read - and not just for all Francophiles.

That "special" TV moment between IMF head Christine Lagarde and CNBC journalist Maria Bartiromo

Recently Christine Lagarde, the head of the International Monetary Fund,  appeared, as she has done regularly, on the US-based satellite and cable television business news channel CNBC.

Facing her was the channel's Maria Bartiromo, a journalist with a proven track record, author of several books and recipient of various awards.

Christine Lagarde and Maria Bartiromo (screenshot montage from CNBC video)

The main thrust of what Lagarde had to say was that "austerity upon austerity doesn't work," with Bartiromo pushing to find out whether Greece would be offered a better deal.

So the scene is set for an interview between two very capable women with Bartiromo quizzing Lagarde on the world global economy (of all things) just ahead of the the annual meetings of the IMF and the World Bank Group in Tokyo.

But remember this was television - a medium in which some journalists, even the most experienced and accomplished can fall into the trap of considering themselves to be at least equal if not sometimes better than the person they're interviewing - or at least giving the appearance of what they have to say and their take on an issue, matters.

You know the sort of thing: a journalist specialising in a certain field becomes the expert qualified to share with viewers, listeners or readers, their point of view.

"Hello subjectivity" and "Goodbye objectivity".

Although there are several examples earlier on in the interview of Bartiromo chipping in with her comments on what Lagarde is saying, take a listen to the exchange that takes place between the two when France is mentioned (fast forward to eight minutes and 57 seconds in the accompanying video - you can watch it here).

Lagarde of course is French and before taking over from Dominique Strauss-Kahn (yes the job has become something of a Gallic domain in recent years) she was this country's finance minister.

Bartiromo wanted to find out (really?) Lagarde's thoughts on the 75 per cent tax rate the French government is planning to impose on those earning more than €1 million annually, asking whether she found it "appropriate".

Ever the international diplomat that she has become, Lagarde was not to be drawn saying she was going to take questions on France for obvious reasons.

"Because it's your country?" asked Bartiromo.

"Correct," replied Lagarde.

But that wasn't enough for the journalist who wanted an answer to the question she had "posed", even if now forced, in part, to give it herself.

"It does seem a little aggressive from a policy standpoint," began Bartiromo.

"Do you think we could see that kind of tax rates in other countries? I mean, this is a real debate. I understand you don't want to criticise or comment on something going on in France. But you have to be thinking about this," she finished, allowing Lagarde a little more room for manœuvre without having to appear to comment openly on internal French politics.

A clever rephrasing of the question from Bartiromo to try to tease out an opinion or a point of view that might otherwise be buried under a blanket of diplomatic doublespeak?

Or a clumsy technique of appearing to the devil's advocate but perhaps letting slip her own thoughts on the subject?

You decide.

Either way, for such a normally dry subject, it's a delicious TV moment as both women retain their poise during what could have been an instant of dead air silence.

The French government's million-billion loan muddle

It's an easy enough mistake perhaps getting a few zeros confused especially when the amounts involved are to most of us pretty mind boggling.

But it's not really the sort of error you would expect from a government purportedly more adept at matters financial and charged with balancing the nation's books.

That however, is exactly what the French government has been up to recently, proudly outlining on its official site how the planned €35 billion loan, announced by the president, Nicolas Sarkozy, earlier in the month "to boost the country's competitiveness and fund the best universities in the world" would be spent.

On Christmas Eve it went online with a breakdown of how the money would be apportioned to each of the main sectors such as universities, small businesses, sustainable development and the digital economy that would spearhead Sarkozy's plan to ensure that France could "fully benefit from the recovery, so that it would be stronger, more competitive, and create more jobs."

Except someone clearly got in rather a muddle as to the number of zeros involved, or simply repeatedly hit the wrong letter on the keyboard (after all it can easily happen to those unfamiliar with the French AZERTY layout) because the 35 billion suddenly became a rather more modest 35 million.

And there the blunder remained for all to see until the afternoon of December 29 when the figures were corrected.




For those who might have missed what was - as the government's press service assured - "a mistake" - the national daily Le Figaro helpfully published a screen shot of the "million-billion" mix-up.

Perhaps it was the timing of the release that left the rather embarrassing miscalculation in the public domain for four days.

After all who in their right mind would take a break from the Christmas festivities to take a glance at what was on the government's website?

But of course it's not the first time the French government has had problems with the flow of information making it on to its own site.

Back in August it published the names of Frédéric Lefebvre, Axel Poniatowski and Paul Giaccobi as three new junior minister appointed to the government, before quickly taking them down again the same afternoon in what initially described as a "technical problem" and was later explained as "human error".